Apple Inc. (AAPL) shares caught attention Monday after Raymond James decided to rejoin the conversation with what amounts to a polite "meh" on the stock.
The firm reinstated coverage with a Market Perform rating, which is analyst-speak for "it's fine, but we're not excited." According to Investing.com, Raymond James sees plenty to like about Apple's fundamentals and improving product cycles, but here's the catch: everyone else sees it too, and the stock price already reflects that optimism.
The Valuation Problem
Apple is trading near its 52-week high of $288.62, with a market capitalization hovering around $4.02 trillion. Raymond James acknowledged what everyone already knows: Apple dominates consumer hardware, its ecosystem is incredibly sticky, and its services business continues humming along. The problem? None of this is news to investors, and the stock's premium valuation leaves little room for upside surprises.
The numbers tell the story. Raymond James pointed to InvestingPro data showing Apple trading at a price-to-earnings ratio of 36.52 and a PEG ratio of 1.58, suggesting the stock is priced above its fair value estimate. The firm noted Apple's valuation sits several turns above its five-year average P/E ratio, making it tough to get enthusiastic at current levels.
Strong Business, Tough Math
Raymond James highlighted Apple's financial strength, including a perfect Piotroski Score of 9, and noted the company generated $416.16 billion in revenue over the past 12 months with 6.43% growth. The firm also acknowledged the iPhone 17 refresh cycle appears to be gaining traction, potentially driving more than $217 billion in revenue for calendar year 2025.
But here's the challenge: when you already have roughly 2.4 billion users in your ecosystem, incremental gains from future technology upgrade cycles become harder to achieve and less impactful on overall results. It's a high-quality problem to have, but a problem nonetheless.
Despite recognizing Apple's recent momentum, Raymond James said it's staying on the sidelines for now. Apple shares closed Monday down 1.38% at $267.26.